Saturday, August 6, 2011

The Voice Of Fiscal Sanity

The day after Standard & Poors downgraded the U.S. government's debt rating, a senior government source has finally given us a stern lecture on fiscal reality.

The American government needs to "cure its addiction to debts" and "learn to live within its means." Damn straight. The USG spends an amount equal to 24 percent of our GNP, but takes in only (only!?) 19 percent.

What's more, it better "address its structural debt problems and ensure the safety" of the dollar if we are to have any hope of economic recovery. I couldn't agree more.

Unfortunately, it was the New China News Agency that delivered that message, but that doesn't make it any less true. I don't normally agree with the ChiComs - indeed, I'll never stop referring to them by that great, semi-offensive, Cold War term "ChiComs" - but when they're right, they're right.

China's own credit rating agency downgraded U.S. sovereign debt instruments two days before S&P did.

I saw this interesting tidbit in the LA Times story about the China's lecture:

In addition to holding about $1.2 trillion in treasuries, an estimated two-thirds of China's $3.2 trillion in foreign exchange reserves is estimated to be in dollars.

So it looks like those wily Chinese have more than one reason to want our government to live within its fiscal means. When they are that dependent on the dollar themselves, we don't just have a creditor, we have a partner.


Anonymous said...

Great Post TSB!

I think I hear them calling you to come back to Tel Aviv for a security update! gwb

Protest draws 300,000 in largest show of force yet
08/07/2011 03:01

TSB said...

I think those are protests against the cost of housing. The Rent Is Too Damn High Party, I guess. In a country of only 7.7 million, and one with other things to worry about, like rockets launched out of Gaza again, that's very impressive.

Anonymous said...

TSB: Damn Right! and as to the Chicoms I think we need across the board military spending cuts with one exception: Our 5 Military Bass Fishing Teams are the best in the world and naturally stimulate the world economy and promote good will!
It's the best gig in the military! gwb

Anonymous said...

TSB: McChrystal figured this out 18 months ago and got fired for his trouble. gwb

Uphill battle to win over villagers in Tangi Valley

By Heath Druzin, Stars and Stripes
Stars and Stripes online edition, Thursday, March 18, 2010

TSB said...

Military bass anglers? I love that! Just the sight of the Alabama ANG coming across the Persian Gulf in 10,000 bass boats would scare the humus out of the Iranians. And then if they landed in ATVs, shotguns duct-taped to the handlebars, and swept across the desert, it would Game Over.

Anonymous said...

TSB:"DTA is silent re: citizen rights."
Does that mean ANY US citizen may be detained ANYWHERE for any suspicion and deprived of any rights for any length of time? I am at (III Cause of Action Under DTA) In my primitive logic that means they could have done the same thing to me for reading Juan Cole at work!! tnx gwb

Anonymous said...

TSB: What if I had been running around with my colleague Hasan after work? Gitmo? or just Bell County Jail? gwb

TSB said...

Regarding the Vance lawsuit, they seem to be arguing that there are geographical limits to Habeas Corpus. I hope not. Lincoln suspended it during the Civil War, but that hardly seems a precedent here.

Anonymous said...

That's great! We could turn the whole persian gulf into a bass fishing paradise after the Iranian surrender.We might need to tow a few melting icebergs down their behind empty oil tankers before we stock it with sea bass and marlin. Good thinking TSB!